Walmart may be making a virtue of a necessity as the new BJP-led govt is vehemently against the idea & has vowed to reverse its predecessor's decision to permit FDI in multi-brand retail.

NEW DELHI: Walmart Stores Inc, which for nearly a decade lobbied hard to get India to open up its supermarkets sector, will no longer canvass for allowing foreign companies to own majority stakes in multibrand retail and only concentrate on growing its existing wholesale cash-and-carry business.

The US-based world's biggest retailer has decided to abandon its old practice of trying to "educate" the government about the benefits to the economy from opening up the sector to foreign players such as itself and will instead seek to impress authorities with how it is building infrastructure and bringing global best practices to India, said Krish Iyer, chief executive officer of Walmart India.

"FDI in multi-brand retailing is not on the agenda of our current engagement with the government," Iyer told ET. "We are only saying that we would engage with the government and all the stakeholders explaining to them what we currently doing in the country and how we are adding value not just for the kirana stores but to the economy in whole," he added.

In deciding to eschew its longstanding demand to open up the supermarkets sector to majority foreign ownership, Walmart may also be making a virtue of a necessity as the new BJP-led government at the Centre is vehemently against the idea and has promised to reverse its predecessor's decision of September 2012 to permit FDI in multi-brand retail.

Not Bothered by BJP's Stance: Iyer

Iyer said BJP's stance on the issue, articulated in the party's manifesto before the elections and expounded by several of its leaders during the campaign trail, does not "bother" Walmart anymore as he praised the new government for making all the right noises since it took office." From whatever I have seen so far in terms of the policy framework and what the government is working on, it's very positive," he said, adding: "We are not asking for anything."

This is a major departure for the Bentonville, Arkansas-based retailing behemoth that lobbied for years, often with help from the highest echelons of the US government, and spent millions of dollars to educate Indian politicians about the benefits of opening up India's supermarkets sector.

When the UPA government finally decided to open up the sector braving vehement opposition from political rivals, Walmart was unable to do much about it as its Indian operation got engulfed in a global anti-bribery investigation that led to major tumult in the company. It had to sack most of its top team in India and its joint venture in India with the Bharti Group also came apart, leaving Walmart in sole custody of its Best Price wholesale cash-and-carry business.

Iyer, who took charge of the India office last January and since then kept away from the media, said India's wholesale retail business, in which Walmart stores are permitted to sell only to businesses and smaller retailers and not to consumers, also provided a vast opportunity.

"We are at a stage where focus is required and focus of the entire team should be in making the current business of cash-and-carry very big. The opportunities to serve under-serviced small retailers in India is immense," he said, and quoted from a McKinsey & Co report that put the market opportunity in the wholesale segment at around $300 billion and expected to swell to $700 billion by 2020.

Walmart presently runs 20 Best Price-branded wholesale stores in India and plans to add another 50 such outlets in the next four to five years. In October last year, Walmart announced it would end a six-year-old tie-up with Bharti and buy out the Indian group's stake in their wholesale venture, effectively going solo in India. Indian laws allow foreign retailers to own 100% of cash-and-carry businesses.